Everyone denies it, but we keep coming around to the idea that the next major stimulus will somehow involve a massive expansion of Fannie and Freddie’s role in rehabilitating housing.
It just makes too much sense. The GSEs seem as though they can do whatever they want, and with an unlimited backstop by the Treasury (which in turn is backstopped by the Fed), there’s just no stopping them… if that’s the direction The White House wants to go. Add in th fact that they wouldn’t need approval from the GOP in Congress and it makes even more sense.
Maybe the ball is about to get rolling on this front. One of the NYT’s unsigned editorials today calls for more to be done on the housing front (noting the ugly numbers in recent weeks), and for Fannie and Freddie to have a role in this.
It’s not too specific… but that’s probably because the possibilities are pretty open-ended, though the gist would be designed to increase refis and lower homeowners monthly payments, leaving more cash in their pockets.
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